ESG factors from the perspective of real estate funds in Poland

Purpose – The purpose of this study was to analyze how ESG criteria are implementing in allocation decision-making processes assets by real estate investment funds in Poland.Design/methodology/approach – As part of the research project entitled Quality of management of ESG aspects and resilient to crises. Enterprises - financial institutions - local government, planned for 2022-2024 at the Collegium of Business Administration at the SGH Warsaw School of Economics, the focus was on how ESG factors are understood by various economic entities from both the private and public sectors. The researched entities were represented by companies listed on the Warsaw Stock Exchange, financial institutions, in particular, investment funds focused on investing in securities and funds investing in real estate, and local government units. The interdisciplinary research team was divided into research groups depending on the type of entity being the subject of the research. Empirical research was conducted in November / December 2022 in the form of focus group interviews divided into the entities under study. The following section presents detailed conclusions from focus group interviews conducted among selected real estate funds. To the research group in the context of real estate funds, consisted of representatives, among others: asset managers of real estate funds who decide on the selection of real estate for investment portfolios, risk managers, managers responsible for creating products and managers responsible for compliance.Findings – The multi-faceted nature and complexity of the ESG issue is reflected in the broad impact of the issue of sustainable development on the functioning of the entire economy, on the functioning of the real estate sector due to the resource-intensity and emission-intensity of buildings. The results of the above-described research among real estate funds indicate that nowadays ESG factors constitute a key challenge for real estate portfolio managers.Research limitations/implications – Currently, the most important contribution to drawing attention to the need to apply the ESG concept are EU cascading regulations regarding the activities of individual groups of entities. The examined entities face numerous challenges, including: such as: the need to learn and understand changes in regulations and requirements of key stakeholder groups in the field of non-financial aspects of management, awareness of opportunities for sustainable transformation in the context of ESG or developing appropriate competences to use them.Practical implications – From the conducted research, it can be clearly stated that real estate fund managers are striving to create a standardized assessment of real estate sustainability because the expected future value of investment portfolios depends on the degree of their sustainability.Originality/value – The research has tracked how ESG criteria are implementing in allocation decision-making processes assets by real estate investment funds in Poland. The real estate funds participating in the described study are in the initial phase of ESG transformation, at the same time, the people representing them are highly aware of the importance of ESG issues for the entities they represent. In the near future, further identification of criteria should be expected to assess the potential benefits resulting from compliance with ESG requirements by entities from the real estate sector as well as closely related sectors.